Margin math pocket cards
Recall the core margin formulas and pricing traps for roofing estimates.
Formula Gross margin Recall the formula before flipping. (Revenue - direct job cost) / revenue Use direct job cost, not only materials. Labor burden, dump, delivery, permits, and commissions belong in the estimate when they are job-driven. Markup vs margin A job costs $10,000 and sells for $13,000. Is that 30 percent margin? The selling price is the denominator for margin. Price floor Required price for target margin Direct job cost / (1 - target gross margin) If cost is $12,000 and target margin is 40 percent, required price is $20,000. Objection Your price is $1,500 higher than the other…
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